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Aerojet Rocketdyne shares drop 11% after offering $200 million in convertible notes

Aerojet Rocketdyne conducted hot-fire testing of a multi-element pre-burner injector for the AR1 rocket engine.
Globe Newswire | AP
Aerojet Rocketdyne conducted hot-fire testing of a multi-element pre-burner injector for the AR1 rocket engine.

Aerojet Rocketdyne Holdings shares shed 11 percent Thursday after the company said it intends to offer $200 million of convertible senior notes in a private placement.

These notes provide potential investors with the option to buy debt securities of the California-based rocket and missile propulsion manufacturer. The senior convertible notes also provide would-be-investors priority payment in case of bankruptcy.

Aerojet Rocketdyne said it will use the offering's proceeds to repay its revolving credit facility and other debts and for general corporate purposes.

Despite Thursday's steep losses, the stock has risen 21 percent so far this year.

Aerojet Rocketdyne Holdings 5-Day Chart